SEC Charges DraftKings with Reg FD Violation

SEC Charges DraftKings with Selectively Disclosing Nonpublic Information Via CEO’s Social Media Accounts

The Securities and Exchange Commission today charged DraftKings Inc. with selectively disclosing material, nonpublic information to investors who followed or otherwise viewed the company CEO’s social media accounts without disclosing that same information to all investors, in violation of Regulation Fair Disclosure (FD). DraftKings agreed to pay a $200,000 civil penalty to settle the SEC’s charges.

The order finds that, on July 27, 2023, at 5:52 p.m., DraftKings’ public relations firm published a post on the personal X account of the DraftKings CEO. The post, according to the order, stated that the company continued to see “really strong growth” in states where it was already operating. DraftKings’ public relations firm posted a similar statement that same day on the CEO’s LinkedIn account. At the time of the posts, DraftKings had not yet disclosed its second quarter 2023 financial results, nor had it otherwise publicly disclosed certain information contained in the posts. Shortly after the public relations firm published the posts, it removed both posts at the request of DraftKings. According to the order, even though Regulation FD required DraftKings to promptly disclose the information to all investors after it was selectively disclosed to some, DraftKings did not disclose the information to the public until seven days later when it announced its financial earnings for the second quarter of 2023.

SEC Charges Advisory Firm GQG Partners With Violating Whistleblower Protection Rule

The Securities and Exchange Commission today announced settled charges against Florida-based GQG Partners LLC, a registered investment adviser, for entering into agreements with candidates for employment and a former employee that made it more difficult for them to report potential securities law violations to the SEC.

According to the SEC’s order, from November 2020 through September 2023, GQG entered into non-disclosure agreements with 12 candidates for employment that prohibited them from disclosing confidential information about GQG, including to government agencies. While the agreements permitted the candidates to respond to requests for information from the Commission, it required notification to GQG of any such request and prohibited responding to requests arising from a candidate’s voluntary disclosure.

Connecticut trader convicted in Petrobras bribery case

A Connecticut oil and gas trader was convicted on Thursday over a nearly eight-year scheme to bribe officials at Brazil’s state-owned oil company Petrobras so two Connecticut trading companies could win business, U.S. prosecutors said.

Glenn Oztemel, 65, of Westport, Connecticut, was found guilty by a Bridgeport, Connecticut, jury on all seven counts he faced, including money laundering, conspiracy and violating the federal Foreign Corrupt Practices Act.

Harris signals support for crypto, in potential break with Biden

In a speech in Pittsburgh about the economy on Wednesday, Harris said it was important for the United States to maintain its dominance in blockchain technology, which facilitates trade of cryptocurrencies such as bitcoin. The Harris campaign on Wednesday also released a policy document that said she would “encourage innovative technologies like AI and digital assets,” a reference to cryptocurrencies and similar technologies such as stablecoins. Harris had on Sunday promised donors in New York City a “safer business environment” for digital assets, as well.

From Directors to Officers: How Fortune 1000 Companies Are Embracing Delaware’s New Legal Armor

Delaware amended Section 102(b)(7) of its General Corporation Law (DGCL) in 2022 to allow exculpation of certain senior officers from personal liability for monetary damages for breaches of their fiduciary duty of care (“Officer Exculpation”). Before it was amended DGCL §102(b)(7) only allowed exculpation for directors. To take advantage, Delaware companies need to include a provision in the certificate of incorporation, which typically will require a stockholder vote to implement for companies that are already public.

Since the law changed, DragonGC has been tracking trends in adoption of Officer Exculpation by Delaware companies. In this report, we examine the adoption of Officer Exculpation to date, with an emphasis on Fortune 1000 companies.

SEC Obtains Final Judgment in Insider Trading Case

On September 20, 2024, the Securities and Exchange Commission obtained a final judgment against defendant Oliver-Barret Lindsay, a Canadian citizen, whom the SEC previously charged with insider trading in advance of an announcement by Long Blockchain Company (formerly known as Long Island Iced Tea Co.) that it was going to “pivot” from its existing beverage business to blockchain technology, which caused the company’s stock price to soar.